Last modified on June 26th, 2023
By Marc Frenkiel
As a leader of a property management firm, you know that you’re responsible for not just resident and owner satisfaction, but employee satisfaction as well.
The 2022 AppFolio Property Manager Hiring and Retention Report uncovered many drivers of employee satisfaction, such as salary, benefits, opportunities for career growth, and flexibility.
But there’s one key driver of satisfaction that seems to have an outsized impact.
On the surface, it might not be obvious how the culture of your company affects the performance of the properties you manage. Properties above a certain unit count often require on-site management. A company with a large portfolio of these types of properties can often find the majority of their employees working solely on-site and not in a central office. As a result, company culture can take a backseat in terms of priority.
The AppFolio hiring and retention report mentioned above found that 25% of property management employees are thinking about leaving their jobs. A toxic company culture can raise this number and further drive employee turnover. But as we point out in the report, creating and nurturing a desirable company culture can go a long way in reducing turnover.
To give you a better sense of what to look out for in your own firm, here are the contributors to toxic culture that data shows are driving employees to quit, and solutions to each challenge that you can take action on.
The data on toxic culture
Researchers at the MIT Sloan Management Review analyzed over 1.3 million Glassdoor reviews and found that toxic company culture is the strongest predictor of employee turnover.
This same analysis identified five universal attributes that they found to “poison corporate culture in the eyes of employees.” These are:
This has to do with how well companies represent diverse groups and whether they are treated fairly, made to feel welcome, and included in key decisions. These diverse groups include five topics: gender, race, sexual identity and orientation, disability, and age. Other drivers of non-inclusivity that were uncovered include cronyism (“promoting their buddies or graduates from the same college rather than the most qualified candidates”) and a general non inclusive culture. Reviews pertaining to this category contained terms like “cliques,” “clubby,” or “in crowd.” Here, employees feel excluded without specifying why.
Reviews pointing to a company’s lack of consideration, courtesy, and dignity for others were grouped into the larger category of disrespect, which was (understandably) found to have the largest negative impact on an employee’s overall rating of their corporate culture.
Other characteristics of a toxic culture that were reported include lack of ethics, cutthroat, and abusive.
Ensure these characteristics are nowhere near your company
It goes without saying that toxic company culture must be avoided at costs. While most leaders would say that none of these things happen at their company, the data suggests that at least one of these characteristics are likely to be present. To get a more accurate view of whether your employees have experienced any of these troubling scenarios, consider reading Glassdoor reviews left by both current and former employees. You can also allow your employees to anonymously provide feedback via a third-party survey tool like Allvoices.
Culture over compensation
A key learning from The MIT Sloan Management Review is that toxic culture is “by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover.”
2022 IREM President Barry Blanton corroborates this finding in the AppFolio report. In his experience, “Employees really do care about culture. They can’t overlook the fact that they have to earn a living, but they also have some terms by which they want to live their lives. What are those things that matter to them, and then how do we get creative in terms of offering those things?”
Data from our 2022 hiring and retention report shows that employees not satisfied with their jobs are significantly less likely to have positive views of their company culture, and the biggest gap between employees at risk of leaving their current role and not those not at risk, is around company culture: Just 43% of at-risk employees agree that they enjoy their company culture, compared to 76% of employees not at risk.
In terms of defining “company culture” and its importance, acclaimed talent strategist and best-selling author Steve Cadigan adds: “Why does someone want to work in your organization? What is unique and differentiates you from other environments in other places in terms of how things get done, how people communicate, the language that we use? If you can answer that, you’re going to arrive at your culture.”
“I really believe culture is the most valuable competitive advantage you have in a world of massive choice for employees today, in a world where they’re telling us they’re thinking about leaving, in a world where we’re seeing more resignations than at any time since we’ve been measuring it.”
How to develop and nurture a positive company culture
A Forbes article describes how organizations named as a “Best Place to Work” tend to have strong, positive corporate cultures that help employees feel and perform their best. The article goes on to provide some guidance on how to develop a positive company culture:
Emphasize employee wellness both in and out of the workplace
While this may be more or less attainable depending on your company’s financial resources, consider offering perks like free or discounted membership to fitness centers or other wellness resources — both physical and mental.
One of the numerous takeaways of The Great Resignation is that many employees don’t feel a sense of meaning, or purpose, in their jobs beyond a paycheck. According to Stacy Holden, Industry Principal and Director at AppFolio, “It’s so important to recognize that today’s environment has changed. Employees are looking for more than just a salary. They’re looking for purpose. They’re looking for a sense of company culture.”
Similarly, the authors of the Forbes article discuss the importance of meaning and purpose in the workplace. Without it, they say, “job satisfaction takes a major hit.” They go on to provide ways to help your teams see the big picture meaning in their day-to-day, including creating “a mission statement and core values and communicating these to employees. Give employees specific examples of how their roles positively impact the company and its clients.”
Corroborating the Forbes insight, 27% of the property management employees surveyed for our 2022 Hiring and Retention Report plan to switch industries to find more fulfilling or rewarding work, reporting that 40% of their time is spent on what they believe is busywork. The report lists possible solutions as well, including adopting technology to eliminate or reduce the repetitive, time-consuming, unfulfilling aspects of property management. Examples include:
- An AI-enabled leasing assistant that can handle all prospect inquiries, responding efficiently to casual inquiries and funneling serious prospects down to your leasing staff.
- AI data entry tools to find accounting discrepancies and parse bills and leases to compile income statements
- AI maintenance tools that automatically respond to maintenance requests, use algorithms to judge level of urgency, and dispatch pre-approved vendors.
These tools let your team provide faster service to residents, focus on bigger picture, more rewarding tasks, and, according to Stacy Holden, “create an environment where employees can solve for the answers that they need, whether that’s the automation through a workflow or whether that is the data that’s presented in such a way that they can have more ownership, and that then turns into empowerment.”
According to CultureIQ (acquired by Perceptyx), 86% of employees at companies with strong cultures feel their senior leadership listens to employees. Concurrently, AppFolio research shows that 20% of property management employees say their employers becoming “more responsive to employee feedback” has improved overall job satisfaction.
Once a positive company culture is established, The Society for Human Resource Management offers guidance on how to nurture and perpetuate it:
It starts with hiring
The first step is to seek personalities that match the organization’s culture. Employees will perform better when there’s a match, and a mismatch in personality can lead to rapid departure, which data shows can cost 50 to 150% of the position’s annual salary. SHRM offers resources to mitigate this risk early.
Once a decision is made, nurture your new hire with:
Proper onboarding protocols teach new employees the company’s value system and how they can contribute to it.
Performance management programs
Clearly outline what is expected from employees, and provide feedback that informs them if they are meeting expectations.
Reward and recognition programs
Motivate employees to act in agreement with the company’s culture and values. For example, if teamwork is a core value, bonuses and/ or recognition should value teamwork.
The importance of creating and nurturing a desirable company culture cannot be overstated. The previously mentioned MIT Sloan Management study found that although culture is frequently listed among companies’ core values and used as a tool to attract new hires, “when corporate culture fails to deliver on these fundamental commitments, employees understandably react with something stronger than annoyance or disappointment.”
Culture matters in dispersed property management teams, too
It’s fair to think culture doesn’t matter or is not possible to nurture in an industry like property management, where employees are often dispersed. It’s misguided though.
Sunbelt Properties is a case study in this idea. While the company manages real estate in five different states with employees dispersed accordingly, they still prioritize culture. Lauren Niziol, HR Director at Sunbelt Properties, explains:
“We recognize that we have properties all over, in five different states, so the question early on was, ‘How do we bring all of these people together? How do we set up collaborative, safe spaces?’ It’s a fast paced job, but there’s still space to have fun group chats, share what kind of music we like, ask questions — property management related or otherwise — share pictures of our children. We’re friends with people that we’ve never met face to face.”
Download our free guide below for more hiring and retention strategies.